How come cryptocurrencies do not yet rule the world?
We asked the world about barriers to crypto-adoption. Continue reading to find out what the confused world replied, and why our Rebalance service with a safe and simple approach to decentralized finance may be what’s required.
During the third week of September, we launched a short poll, put out a message to the Norwegian blockchain community and asked people to circulate the link. The first 100 replies included 80 respondents with crypto and 20 without crypto. Our respondents were then asked to rate the difficulties of crypto-adoption. Before we discuss the findings, consider the responses below. A big number indicates a big problem.
- Registering to buy crypto is difficult and time-consuming (scores an average of 6.3 on a 1–10 scale)
2. Why would I need crypto? There is nothing tangible to buy (average 5.9)
3. There are many products offered in decentralized finance (e.g. stable coins, interest-bearing accounts, geared investments.) This causes confusion/apathy (average 5.3)
4. The whole field is associated with risks, scams and an unclear legal procedure (average 7.0)
5. There is too much friction. We cannot easily switch between investment options to achieve a balanced portfolio (average 5.6)
In hindsight, we should probably have included one question about awareness. There are no official statistics on crypto-adoption, but it seems fewer than one in ten Norwegians hold a cryptocurrency and part of the reason may well be a lack of awareness. What then about the other barriers to entry?
One finding is the sheer diversity of opinions. Most of the time, our questions generate answers what resemble a normal distribution: the most common response is close to the mean and deviating opinions become successively less common. For example, asked about the difficulties of buying crypto (question 1), the average score is 6.3. The most common answer was 7 followed by 8 and with 6 close behind. However, the range of common answers is quite wide. Asked about the difficulty of buying crypto, all answers between 5 and 10 are quite common. In statistical terms, the standard deviation is roughly 2.5 — it is roughly the same for all the polled questions. NB: asked whether decentralized finance is too confusing, no opinion is discernably more common than the others. Possibly, our respondents have various interpretations of the issue, agreeing for example that decentralized finance is confusing, but questioning its potential and attractiveness.
As a group, respondents identify many significant barriers. The risk of fraud and the lack of legal frameworks is indeed the top concern with an average score of 6.95 on question 4. The second biggest barrier is the difficulties of buying crypto (aka “fiat swap”) reflected in an average score of 6.3 on question 1. It should be no surprise that people, when asked about barriers to adoption, focus on the barriers to entry.
Nevertheless, if people fail to enter, it may be because the reasons for doing so are insufficiently compelling. Our respondents tend to agree. They put a high score also on the various difficulties one encounter when using crypto. Question 2 deals with difficulties of using crypto as a means of exchange to buy goods — the score is 5.9 which is substantial. The difficulty of understanding and using decentralized financial products are rated at 5.3 and 5.6 (cf. questions 3 and 5). Easy to use financial products are not the biggest barrier to the use of crypto, but the scores are indeed significant and a substantial concern of our respondents.
Roughly speaking, the conclusions above remain intact both for holders of crypto and non-holders: the two groups are remarkably similar in their judgment. Generally speaking, holders of crypto are less concerned about the various barriers — their average score of any barrier is 5.8 vs 6.7 for the non-holders. On our survey of difficulties, they are always one step lower on the 1–10 scale. On one issue, however, the two groups differ substantially, and that is the question of fiat swap. Crypto-holders rate this barrier at (5.9) — that is just an average concern. Non-holders rate it at 7.9, a concern significantly above average.
In one important aspect, and non-holders are remarkably similar. They tend to hold quite diverse opinions about the significance of any given barrier (in statistical terms the standard deviation is roughly the same in both groups).
This survey was conducted by Blockchangers as part of an international effort to lower barriers against the use of cryptocurrencies. Learn more on IDEO. More analysis is forthcoming. Stay tuned to learn about the various tribes who own crypto and their concerns.